2019 Kumtor Environment and Sustainability Report
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What else can we make to improve our performance? ENVIRONMENT AND To provide your feedback about our performance, please SUSTAINABILITY contact us at [email protected] REPORT or visit www.kumtor.kg. ENVIRONMENT AND SUSTAINABILITY REPORT 2019 1 ABOUT KUMTOR MINE Kumtor mine is one of the largest western-operated gold mines in Central Asia. It has been operating since May 1997 and has produced approximately 12.6 million ounces of gold to December 31, 2019. Kumtor Gold Company CJSC (KGC) is the concession holder for the Kumtor deposit and is responsible for the entire production cycle. The Kumtor open pit mine is located approximately 350 Centerra also owns late-stage development properties: kilometers southeast of the southeast of the capital of the the Oksut Gold Project in Turkey, the Kemess Project in Kyrgyz Republic, Bishkek, and 60 kilometers north of the British Columbia, Canada, which includes the Kemess border with the People's Republic of China. It is at an altitude Underground and the Kemess East gold-copper projects, of 4,000 meters above sea level in a partially glaciated and a 50% interest in the Greenstone Gold Property which permafrost zone in the Central Tien Shan Mountains. The includes the Hardrock Gold Project in northwestern Ontario, current life of the Kumtor mine is until 2026. Canada. Centerra through its acquisition of Thompson Creek Metals Company in 2016, also owns a well-established, fully About Centerra integrated Molybdenum Business consisting of an operating metallurgical processing facility and two primary molybdenum Centerra Gold Inc. (Centerra) is the parent company, which mines, which are currently on care and maintenance. owns 100% of Kumtor Gold Company. Centerra is a publicly listed, Canadian-based gold mining company engaged The Company also has active exploration joint ventures and in operating, developing, acquiring, and exploring gold exploration properties in Canada, Finland, Mexico, Sweden, properties in North America, Asia and other emerging markets Turkey and the United States. Kyrgyzaltyn OJSC, a state- worldwide. The Company is one of the largest Western-based owned entity, is Centerra's largest shareholder, owning gold producer in Central Asia and its shares trade on the 77,401,766 shares. Toronto Stock Exchange (TSX) under the symbol CG. Additional information on Centerra is available at SEDAR Centerra operates two flagship assets: the Kumtor gold mine in (www.sedar.com) and on the Company's website the Kyrgyz Republic and the Mount Milligan gold-copper mine (www.centerragold.com). in British Columbia, Canada. About this Report This document is the Kumtor Annual Environment and note our Cautionary Note regarding the forecast information Sustainability Report for the 2019 financial year (ending on the inside back cover. This report will also be available in December 31, 2019) except where otherwise noted. This the Russian and Kyrgyz languages. As we continue to further report is focused on the Kumtor mine in the Kyrgyz Republic. improve our systems and approaches, we welcome your Performance data include only Kumtor's own operations, comments and suggestions on how we can further improve unless noted otherwise, although the policies of Centerra and our annual environmental and social reporting and practices. Kumtor apply to both employees and contractors. Financial You can find contact details on the back cover of this report. metrics are reported in US dollars (USD) unless otherwise stated. This report has been prepared in accordance with GRI Standards: Core option. In addition the Report addresses the key reporting requirements centered in Kumtor's Environment Managemeent Action Plan (EMAP). For each specific sector various indicators set in GRI's Mining and Metals Sector Supplement (see www.globalreporting.org) are disclosed. In determining the scope, content, and boundaries of this report, we considered an importance evaluation process 102-1/ described in the Governance Section of this Report. Please 102-2/ 102-4/ 102-5/ 102-6/ 102-45/ 102-46/ 102-49/ 102-50/ 102-51/ 102-52/ 102-54 2 ENVIRONMENT AND SUSTAINABILITY REPORT 2019 CONTENTS About Kumtor mine .............................................................................................2 About this report ..................................................................................................2 Message from the President .............................................................................4 Operations Overview ............................................................................................8 Environmental and Sustainability Snapshot .............................................10 1 Governance 1.1 Governance Model .............................................................................14 1.2 Sustainability Management .............................................................18 1.3 Risk Management and Continuous Improvement ..................18 1.4 Materiality Assessment ......................................................................20 1.5 Business Ethics .....................................................................................23 2 Economic value 2.1 Economic Performance .....................................................................26 2.2 Local Procurement ..............................................................................28 3 People 3.1 Workplace Practices ...........................................................................32 3.2 International Women in Mining Profile ......................................34 3.3 Occupational Health and Safety ....................................................43 4 Environment 4.1 Environmental Responsibility ..........................................................50 4.2 Environmental Monitoring ...............................................................52 4.3 Biodiversity .............................................................................................56 4.4 Energy Use and Carbon Emissions ................................................64 4.5 Air Emissions .........................................................................................66 4.6 Waste Management ............................................................................70 4.7 Unprocessed Waste Rock ..................................................................73 4.8 Tailings Management .........................................................................74 5 Glaciers and water management 5.1 Water Use and Treatment .................................................................76 5.2 Water Quality and Compliance .......................................................80 5.3 Glacier Management ..........................................................................84 5.4 Petrov Lake Water Balance ...............................................................88 6 Social responsibility 6.1 Stakeholder Engagement .....................................................................90 6.2 Community Investment Projects ........................................................95 7 Kumtor Mine Closure 7.1 Tailings Management Facility (TMF) Closure ........................... 101 7.2 Waste Rock Dump Closure ............................................................ 102 7.3 Post-Mining Land Use ..................................................................... 102 7.4 Socio-Economic Impacts of Mine Closure ............................... 103 7.5 Social Impacts of Mine Closure ................................................... 106 7.6 Closure Costs...................................................................................... 108 Glossary and Abbreviations...........................................................................110 Performance Data .............................................................................................113 GRI Content Index .............................................................................................116 Appendix Environmental Monitoring Data ..................................................................120 Cautionary Note Regarding Forward-Looking Statement .................135 ENVIRONMENT AND SUSTAINABILITY REPORT 2019 3 MESSAGE FROM THE PRESIDENT The progress we have achieved, as well as the challenges we faced in 2019, are described in this report. Our team can be proud of its operating performance. We have exceeded almost all performance results in gold production, maintenance, ore processing and reduction of total costs. ZERO INCIDENTS remain our number one target which means we will continue to prioritize our Work Safe | Home Safe program, as well as tools such as Reliable Control and Visible Felt Leadership principle. In late 2019, the Strategic Agreement on Environmental Protection and Investment Promotion with the Government of the Kyrgyz Republic concluded and came into force. This agreement provided additional incentive for the Company's development and created additional opportunities for the Kyrgyz Republic. in 2019 (including taxes, refinery fee, local procurement of Contribution to the Country goods and services, infrastructure, donnations, etc.) amounted Economy to $366 million, making the total of payments since 1994 more than $4.0 billion. KGC is the largest taxpayer and largest KGC remains an enterprise that makes a significant employer in the private sector of the Kyrgyz Republic. By the contribution to the economy of the Kyrgyz Republic. In 2019, end of 2019, the company employed 2,631 Kyrgyz citizens,